Some business practices can lessen the impact of fiscal uncertainty.
Government agencies face a lot of uncertainty, especially after four government shutdowns and multiple continuing resolutions in the last decade alone.
Amid these chronic uncertainties, agencies are being mandated to modernize their IT systems and innovate problem-solving with new technology, spurring a trade-off between maintaining the status quo and driving digital transformation. Federal IT leaders are on the hook to manage the rising costs of doing both.
Based on many factors that we see with our federal and Defense Department customers, with policymakers, and the technology community, there are a few business practices that can lessen the impact of fiscal uncertainty, and help organizations modernize and drive digital transformation.
Proven IT consumption models are offering federal agencies flexibility, in spite of continuing resolutions and shutdowns.
Funding uncertainty and continuing resolutions are a routine part of federal budget planning, with Congress passing CRs in all but 4 of the past 40 years. While a level of uncertainty is to be expected, the recent shutdown shows that uncertainty is here to stay.
One way organizations are taking back some control is by diversifying the way they acquire technology resources. Managed services, shared services, subscription-based services and traditional ownership all have their use in government. Not every element of the IT enterprise needs to be owned and amortized over its lifetime, and similarly, not every element is practical to be fully offloaded through managed services.
By determining what the agency needs total control over, versus what’s needed on an on-demand basis, versus what would be better owned/operated by a third party, you can reduce the impact of perpetual continuing resolutions and shutdowns. Diversifying IT procurements this way can give you flexibility and help reduce the impact of annual budget showdowns.
Avoid lengthy, restrictive contracts.
IT managers also face the challenge of managing a multitude of available cloud formats, and cloud bills’ hidden costs are often one of the biggest surprises. In the recent Vanson Bourne Enterprise Cloud Index, 35% of respondents reported going over budget on their annual public cloud budget, and a 2018 IDC survey found that 80% of those surveyed reported that they would be moving existing public cloud applications back on-premise or into a private cloud.
Begin with the end in mind. Don't commit to lengthy contracts with restrictive terms that discourage easy transitions from one provider or format to another. These are the things that IT vendors' dreams are made of, and they are designed to achieve “stickiness”, also known as “lock-in.” These arrangements put the vendor in the drivers' seat. Don't be the passenger, who locks themselves into years of doing business with one vendor. Industry organizations maintain their agility and culture of innovation by avoiding these sort of restrictive arrangements, and federal agencies should consider following suit.
Focus on outcomes rather than features and require vendors to be your creative problem solvers.
Federal agencies face the challenge of solving modern problems while maintaining existing IT systems. The Office of Management and Budget reports that upward of 80% of the $45.8 billion budgeted for federal civilian IT for the 2019 fiscal year will be spent on operations and maintenance. A significant amount of resources are spent on sustaining legacy IT, due to contracting processes, how funding is appropriated by Congress, and annual CRs that force agencies to prioritize maintaining what they already have.
By focusing on the end result instead of getting bogged down in restrictive technical requirements, organizations can avoid getting trapped in a cycle of maintaining the status quo over innovation. When writing requests for proposals, challenge vendors to be your creative problem-solvers in the most resourceful and cost-effective manner possible instead of limiting your potential with narrow technical specifications. Imagine if federal agencies wanted to reduce the carbon footprint of their car fleets, and listed every feature of a traditional combustion-engine car as a requirement in the RFP. This could disqualify more innovative solutions that don't use gas at all. Why forfeit the innovation that's available by limiting creative problem solving this way?
The Bottom Line
Federal IT leaders are more empowered and have more options than ever today. By leveraging diverse IT consumption models, avoiding restrictive specifications and equally restrictive contracting practices, agencies can reduce the impact of our federal budget ups and downs, and gain the control that a customer should have over what they purchase and when.
Chris Howard is vice president of U.S. Public Sector for Nutanix.
NEXT STORY: Mass Surveillance Is Coming to a City Near You